Davos 2020: Buying Air India Will Be Out Of Emirates’ ‘Comfort Zone’
Emirates has said that it is not planning to bid for India’s national carrier as there are “difficulties” to entering the country and that the middle-eastern airline lacks the management bandwidth to go out of its “comfort zone”.
There’s quite a lot of trade rules and difficulties to enter to any market in India, Adel Ahmad Al Redha, chief operating officer of Emirates told BloombergQuint on the sidelines of the World Economic Forum in Davos, Switzerland. “As far as investment (in Air India) is concerned, there’s nothing yet on the table.”
Emirates’ strategy is to focus on their home country, according to the company’s Chief Commercial Officer Adnan Kazim. “The time you enter equities (overseas) you tend to go away from your home comfort zone that you have in terms of policies that you have and so many other things that today you have control over.”
The government recently finalised the draft norms for inviting expressions of interest to sell Air India—which is saddled with $8 billion in debt—after its first bid to sell the national carrier failed.
But expanding services in India isn’t off the book for Emirates. India, which can offer more opportunities because of the size of its population, should allow free access to its market, according to Kazim.
“We’re sitting on restricted bilateral (ties). This restriction that we live with, unfortunately, is hitting even the Indian carriers,” he said. Adding that there are “major” opportunities for both United Arab Emirates and India, Kazim said, adding that opening up of the bilateral agreement will benefit both the nations.
I would say if we double the capacity, we will not be enough. That’s the kind of bilateral we need to look at.Adnan Kazim, Chief Commercial Officer, Emirates
There’s a “bottleneck situation” at India’s core airports, Kazim said. The country needs to give access to its regional airports to enhance capacity, he said.
“You cannot cover everything through Bombay and Delhi,” he said. Emirates can bring in a “huge opportunity” in terms of additional tourists to India but currently at least 85-90 percent of this network is not being covered by Indian carriers, he added.
“India shouldn’t put restrictions on capacity. It should open up and go for a free flow between the two countries.”
Watch | In Conversation With Adel Ahmad Al Redha At WEF Davos 2020.